New Suitor for Jones Soda

CNNMoney.com recently reported that Jones Soda terminated an exclusivity agreement with potential purchaser, Reed's, "to explore an unsolicited proposal sent by a second suitor." Jones Soda previously announced plans to be acquired by Reed's for just under $10 million. Jones Soda also agreed to reimburse Reed's for $75,000 in expenses incurred due to its termination of the exclusivity agreement.

Why would Jones Soda do this? From a negotiation perspective, when a seller can find at least two bidders, the seller's leverage is usually strengthened because now they have a good alternative (or Plan B) to each of the bidders. Finding multiple potential buyers allows a seller to play each buyer against the others to obtain the best possible deal.

Here, Jones Soda's negotiators believed the value of terminating the exclusivity agreement exceeds its $75,000 cost. While time will tell if this move pays off, it is almost always a good idea to take the time to find more than one potential buyer, or, as is the case here, to not look a gift horse in the mouth if a new suitor unexpectedly appears.